Ecuador: Extractivism for the Twenty-First Century?

Adam Chimienti and Sebastian Matthes

 

“Development is a voyage with more shipwrecks than navigators.”

—Eduardo Galeano, Open Veins of Latin America

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Throughout Ecuador, billboards and state newspapers promote the idea that a “citizen’s revolution” is underway. Indeed, many international observers look to Ecuador as a radical and exciting model, with the hope that the country will create a new development strategy making environmentalism a core concern. The charisma and economic heterodoxy of President Rafael Correa contribute to the enthusiasm of many Ecuadorans for the direction in which their country is heading, as borne out by his 63% approval rating in July.1 Many saw the 2008 Constitution that recognized the rights of nature (articles 71-74) as a milestone in governance.2

But then, on August 15, Correa announced the end of the environment-friendly Yasuni-ITT initiative, blaming the global community for its failure. For many, this abrupt halt to a promising environmental initiative called into question the radical environmental nature of his governance. The Yasuni-ITT initiative proposed the safeguarding of a delicate ecosystem by not drilling for oil, in exchange for payments from the worlds developed countries of roughly 50% of the value of the oil reserves, about $3.6 billion. The area in question, the Ishpingo-Tambococha-Tiputini (ITT) section of Yasuni National Park, ranks among the most biodiverse regions of the world. Its preservation would be a commitment to respect and value biodiversity and “uncontacted” peoples (there are two of these tribes reportedly living in this section of the forest), and an acknowledgment that there is more to life than oil. The Andes-Amazon corridor contains no less than one-sixth of all known plant life and a rare abundance of insects and birds per hectare.3 Fresh water has much to do with this sheer density of nature and is vital for its sustenance. But the consequences of Ecuador’s excessive dependence on fossil fuels and minerals are visible here, and the future seems rather bleak.

President Correa blames the Global North, and it is certainly complicit in the innovative initiative’s failure, as the assumption was that rich countries would provide the funding necessary to preserve the Yasuni-ITT. Correa and others calling for climate justice often highlight the vulnerability of developing nations and the poorest people within them to climate-related disasters; that believe that the wealthier countries, whose development mostly took place prior to global awareness of problems caused by emissions, owe a huge debt to the developing world and future generations. As main producers of carbon dioxide, countries such as the United States and Germany maintain an ambiguous position in the debate on climate justice. Dirk Niebel, the German minister of economic cooperation and development, was one prominent critic of the plan. His position embodied a lack of diplomatic willingness as he repeatedly stated that his country is not willing to pay for non-action (i.e. not drilling).4 But many critics argue that President Correa also deserves blame for the failure of the initiative.

Correa’s economic strategy demonstrates the extraordinary importance of extractive industries in Ecuador. Since the shift away from bananas under the military governments in the 1970s, oil revenues now make up nearly one-third of the national budget. Moreover, Correa´s administration has seen an expansion of the palm oil sector and large-scale mining projects, both notoriously detrimental to ecosystems. Correa’s environmentalism has been reduced to vague rhetorical hinting at a move beyond extraction, but he justifies such environmentally destructive extractive policies with their ability to fund programs in the struggle against poverty. His popularity is based in no small part on socioeconomic advances and such achievements should certainly not be dismissed:

From 2006 to 2012, the national economy grew at an annual average of 4.1%, higher than both the global and regional average.

The Ecuadoran middle class increased its ranks significantly, growing from 14% to 35% of the national population between 2003 and 2012.

Unemployment, at 4.1% in 2012, is at a record low, and is the lowest in Latin America aside from Cuba.5

Many Ecuadorans link this socioeconomic advancement to President Correa’s leadership. Under his administration, social spending in education and health care has significantly expanded, and massive infrastructure projects have been initiated. Since his election in 2007, Correa has overseen a remarkable reduction of poverty and has made headlines by aggressively negotiating with extractive companies to increase state revenues.6 Thus the national development strategy (Plan Nacional para Buen Vivir 2009-2013) emphasizes the importance of redistribution and the reduction of inequality, in addition to environmental protection.7

Critics such as Alberto Acosta, an economist and former minister of energy and mines under Correa, contend that the economy excessively depends on the export of primary products and lacks any evident push toward sufficient diversification. Therefore, many argue that exploiting Yasuni will only perpetuate a faulty economic model, prompting some to call for alternative approaches like an increase in taxes or cutting subsidies.8 The expected annual revenues from oil in the Yasuni-ITT blocks are now estimated at nearly $18 billion, nearly three times the original estimates from 2007, which helps explain the government’s new position.9 There are limits to economic dependence on oil extraction, but the state doesn’t seem willing or able to acknowledge them. In fact, Correa frequently invokes the importance of drilling for the historically impoverished nation:

“Our way of life is unsustainable if we don’t use our oil and minerals in the next 10 or 15 years while we develop alternative energy sources. Those who say we should not exploit our resources would jeopardize the programs we are advancing to put Ecuador among the first rank of Latin American nations. They would return us to the status of being a poor nation without a future.”

Responding to its domestic and international critics, the government has stressed that the ultimate care will be taken in extracting resources from deep within the Ecuadoran Amazon. But Dr. Kelly Swing, a U.S.-born biologist who has operated a research station in Tiputini since 1994, believes responsible extraction is easier said than done and that roads (gaining access to the oil fields), perhaps more than rigs (the drilling itself), will be a major factor in determining the future of the region.

This invites the question: Whose way of life is the president referring to exactly? What about the indigenous people and the small-scale farmers of the Oriente who have been plagued not only by foreign oil companies but by state-owned firms as well? While much of their dignity has already been compromised by the push for modernization that primarily benefits the wealthiest citizens in the urban areas of Guayaquil, Quito, and Cuenca, how will these citizens fare under more extraction schemes?

In Ecuador’s northeastern province of Sucumbíos, surrounding the capital Nueva Loja, the state-owned oil-companies PetroEcuador and PetroAmazonas contribute to ongoing contamination through frequent oil leaks and the ubiquitous gas flares dotting the once-pristine landscape. Those living near oil transport or excavation sites suffer extensive contamination of their soils and potable water.

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Earlier this year, in Pacayacu, 40 minutes east of Nueva Loja, an assembly was convened to address the issues of clean water and human rights. It was noted that both are rare commodities for the people of the region. People from the small Amazonian parish of Pacayacu are not likely to be featured in government propaganda anytime soon. Francisco, a man around 60 years old, was a stoic observer at the assembly on water, and even brought a water sample to the gymnasium that day, along with failed crops of tamarind and plantains. The smell of the water that he captured from his well and carried in a plastic container was nauseating. He explained to us that several members of his family were very sick and he himself often has serious stomach pains. Moreover, his animals keep dying and the fruit that he produces has no value. His neighbors have children with visible illnesses. One woman who lives nearby became blind and her adolescent son is unable to speak properly. Another neighbor has a son dealing with mental retardation and requires special attention.

Across the canton there is precious little potable water and, as a consequence of the contamination, the soil is full of dangerous substances. For the rural population, agriculture and fishing are a main source of income and a staple of the local subsistence economy. Due to the lack of adequate alternatives, the population is forced to use the contaminated water for their animals, agriculture, personal hygiene, and even drinking water. Many of the assembly participants complained about the high rates of disease and illness. Esteban, a local activist who lost his wife from cancer, proclaimed angrily, “They are poisoning us.”

The “they” in Esteban’s case are the state-run firms. Alexandra Almeida from Acción Ecológica told us that Esteban’s story is a common one. She explained that while the Correa administration has set about trying to help the people in the region through public works projects, it has not done much about the water supply. A study published by the Journal of Third World Studies in 2011 found that the sole family with a rainwater catchment system in this region was also the only family that did not report the health complaints that were common among their neighbors.11 Many here believe that rainwater collection as an alternative water source is the best way to improve the lives of affected community members, especially given the seeming impossibility of meaningful environmental change.

Unfortunately, petroleum appears to be an indelible feature of this region, regardless of future national development strategies. It is obvious that no single leader or government will overcome dependence on oil. It will instead require a global paradigm shift, but there are no indications of such a shift on the horizon. Tragically, it seems that even the most radical of national leaders and movements will depend on the models laid down by international capital and a system that is fueled by waste and greed.

The plan to extract oil from the Yasuni-ITT has reignited a debate over Ecuador’s development strategy. Many economists, environmentalists, and community rights activists believe that there is a dangerous flaw within the prevailing logic of the administration, i.e. that the government seeks to overcome poverty through extraction. This framework has been accepted for developed economies such as Germany and Japan. But is this course possible for a country such as Ecuador, a country whose deposits lie in ecologically sensitive and globally essential forests? Perhaps, as activists demand, a seat at the table must be reserved for those with the most immediately at stake.12 Presently, many Ecuadorans who want to preserve Yasuni-ITT are working on a popular referendum and hoping that democracy will prove decisive in the struggle between conservation and extraction. If not, then the “citizen’s revolution” of the Correa government runs the risk of excluding the most vulnerable citizens and accepting the ecologically destructive economic framework of global capital at a time when the world desperately seeks alternatives.

 


 

1. Ángel Polibio Córdova, “Falta información sobre el Yasuní,” Expreso, September 3, 2013, http://expreso.ec/expreso/plantillas/nota_print.aspx?idArt=5049403&tipo=2.

2. Ecuador’s 2008 Constitution is available in Spanish through the Asamblea Nacional at http://www.asambleanacional.gov.ec/documentos/constitucion_de_bolsillo.pdf or in English at http://pdba.georgetown.edu/Constitutions/Ecuador/english08.html.

3. Margot S. Bass, et al, “Global Conservation Significance of Ecuador’s Yasuní National Park,” PLOS ONE, 19 January 2010, 5(1): e8767. doi:10.1371/journal.pone.0008767.

4. See the speech by German minister Dirk Niebel given on November 8, 2011 at http://www.youtube.com/watch?v=pKw3C5k6r1Q.

5. Banco Central de Ecuador (2013): "Estadísticas Macroeconómicas." Presentación Coyuntural. Mayo 2013; and CIA Factbook at https://www.cia.gov/library/publications/the-world-factbook/rankorder/21....

6. “Correa wins re-election by a landslide turning him into indisputable regional leader,“ MercoPress, Feb 18, 2013, http://en.mercopress.com/2013/02/18/correa-wins-re-election-by-a-landsli....

7. Ecuador’s national development strategy can be accessed online at http://www.planificacion.gob.ec/plan-nacional-para-el-buen-vivir-2009-2013/.

8. Mónica Orozco, “El Modelo Económico Necesita el ITT,” Diario El Comercio, Sep 3, 2013, http://www.elcomercio.com/negocios/Yasuni-ITT-economia-Ecuador-negocios-....

9. “Correa rechaza cooperación e intromisión de Alemania en caso Yasuní ITT,” Diario El Comercio, Aug 21, 2013, http://www.elcomercio.com/negocios/Correa-petroleo-Yasuni-ITT-Alemania-E....

10. This comment is from President Rafael Correa’s weekly broadcast to the nation in April and was translated by Ecuador Digest at http://www.cuencahighlife.com/post/2013/04/11/ECUADOR-DIGEST3cbr3eCorrea....

11. James Rochlin, “Development, The Environment and Ecuador’s Oil Patch: The Context and Nuances of the Case Against Texaco,” Journal of Third World Studies, (Fall 2011), 28:2.

12. Chris Jochnick and Paulina Garzón, “A Seat at the Table, ” NACLA: Report on the Americas, Jan/Feb 2001, 41-47, https://nacla.org/article/seat-table.

 


 

Adam Chimienti is a PhD candidate researching Sino-Latin American relations at National Sun Yat-sen University's Institute of China Asia Pacific Studies in Taiwan. Sebastian Matthes is a social scientist and PhD candidate at the University of Kassel studying neo-extractivism in Latin America.

 

 


 

Read the rest of NACLA's Winter 2013 issue: "Latino New York"

 

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